Crystal ball in a digital world

What will shape the media industry over the next few decades? Digital technology. What will be the key focus of marketers over the next few decades? Customer engagement. Are the two connected? Absolutely. Can anyone predict accurately how they will change the media and marketing business? Absolutely not.

Forecasting the future of media and marketing is like waking up in the middle of the night and guessing the time: the chances of getting it right are almost zero.

Digital technology has brought enormous changes to the way news, information and entertainment is distributed, and to the way companies sell their products and services to consumers. It will continue to generate changes, but exactly where those changes will take the media and marketing world is anyone’s guess.

Sixty years ago, the media world was a simple place. People got their news and entertainment from radio, newspapers, magazines and cinemas. Marketers used those media, plus outdoor ads, to sell their wares. Even the concept of mass marketing – selling homogenous products to all people using media targeted at all people – had not really taken hold and would not become common until television arrived in 1956.

In 1951, no one could have accurately predicted what the Australian media world would look like in 2011. They might have guessed that TV, which emerged in Europe and the United States in the 1920s and 1930s, would arrive here. But the internet? Mobile phones? Electronic tablets? DVDs?

The spread of digital technology has accelerated the pace of change in the media and marketing sectors over the past 10 years and will continue to drive change over the next 10 years and beyond. Consumers are always willing to try new technology, rejecting it quickly if it doesn’t offer the right value and functionality, and embracing it if it does.

The theory that different forms of media are locked in a death roll is popular, but wrong. TV did not kill radio. DVDs did not kill cinemas. The internet has not killed TV, newspapers, radio or cinemas, all of which are using digital technology to defend themselves and – they hope – draw new users.

Australians’ media consumption time is elastic. According to Roy Morgan Research, people spend an average of 13 hours and 16 minutes using the internet each week, which represents about 26 per cent of their total media time. The time spent watching TV and listening to the radio has declined marginally, but still accounts for 40 per cent and 26 per cent of total media time respectively.

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The rise of the internet, smartphones and electronic tablets has increased the time people spend with media and entertainment products. How much further that time can stretch before some media are dropped is unknown.

The steady decline in sales of print newspapers over the past four decades has been exacerbated by the spread of digital media. It is likely printed newspapers will be the first medium killed by digital technology.

But newspaper publishers will not vanish: they will transform into news publishers, pumping out their content via myriad forms of digital media, albeit at lower prices than in the past. The internet and related digital products have fragmented consumers’ media time and made life harder for marketers – who now need to use more media to reach consumers – and “old" media companies.

But that fragmentation, coupled with more sophisticated data collection and mining techniques, has given media and marketing executives a way to talk directly to discrete groups of consumers, develop more tailored products and promotions, and get closer to the new Holy Grail of marketing: engagement.

Internet sceptics say it is not an engagement medium: it is a “reach" medium, corralling huge groups of consumers with content that is usually free. But the rise of ad campaigns based on behavioural targeting – that is, putting ads in front of people based on their internet usage habits – and the growing use of more personal internet-enabled devices such as smartphones and tablets is giving companies new ways to precisely target consumers, strike up conversations with them and engage them.

Digital technology has given – and will continue to give – people more control over how, when and where they consume media and the marketing messages delivered by media. That level of control will increase as technologically passive media such as newspapers, magazines and free-to-air TV become more active, giving people the ability to select, reject and help shape content.

People do not value or enjoy media and entertainment content less than they did 60 years ago. But the emergence of more media – including media that gives people a way to share their views about companies and brands, and create their own content – has made them more discerning, demanding, and price-sensitive. Whatever else happens over the next 60 years, that empowerment will not go away.